More from Edwards

TPMCafe:

First, we need to help families fight financial rip-offs. Low-income households sometimes pay thousands of dollars more for the same mortgage. The head of Fannie Mae once said that as many as half of families who are getting subprime mortgages could actually qualify for prime mortgages-they're steered to where they have to pay more. The Center for Responsible Lending, based in Durham, North Carolina, finds that predatory lending costs families $9.1 billion per year.

Fair enough Senator, I agree that teaching people how to find the best rates is probably a good idea. Now, the very fact that Low-income households have a mortgage is encouraging though.

We need a strong national law to stop predatory lending

Woah, slow down a minute here. I'm not convinced we need a new law for this. It is one thing to worry about poor people paying more than they need to because of better choices in credit, it is another thing entirely to lower the amount lenders can charge poor credit risks. That seems more likely to keep potential home owners in a rental situation than to help them out of poverty.

Paul Sarbanes has an excellent proposal to go in the right direction

I admit I haven't studied the bill in question, but given my experience with the Sarbanes-Oxley regulations, I am more then a little leery of anything out of Sarbanes office.

We also need to crack down on abusive payday lending, which costs families another $3.4 billion. There is no reason that a company should be allowed to squeeze huge profits from a family by making loan after loan at an effective interest rate of 400 percent or higher.

I'm not one of the poor bring it all on themselves sort of people, but lets be honest and acknowledge that at least some do. Anyone who is going to a payday lender for loan after loan needs some serious help with financial management. These companies also serve a useful purpose, for those who don't make them a habit, the short term loans (at yes, horrible rates) can help out greatly with an unexpected emergency. Getting rid of them probably won't help any poor people not be poor any longer, but it might force people into even less desirable alternatives. Payday lenders are not a great option, but they are better than mafia loan sharks.

We need to encourage low-income families to get better access to credit by encouraging banks to go into underserved areas.

I don't follow exactly how we will do this. Banks are happy to go anywhere they can make money. Encouraging them doesn't seem likely to change their bottom line, and the bottom line is what makes this decision. I suppose we could 'encourage' them by some sort of subsidy, but giving money to banks to do things that would otherwise cost them money doesn't seem very bright to me.

And finally;and this issue touches all American families;we need to crack down on the abuses by those credit card companies: their ability to raise your interest rate on money you'vve already borrowed, even though you haven't missed a single payment; those advertisements that promise you one thing but then deliver another; and their refusal to disclose even the most basic information to borrowers, like how much it will cost to repay your loan if you make only minimum payments.

This, I agree with. Changing the rates without notification, and an including an option to cut off any further credit and keep the original rate on the balance seems only fair. The advertising could, and should be clearer as well. I don't know about requiring them to disclose how much you will have to pay if you only make minimum payments however. I would prefer we teach math in schools so that people can figure this out themselves. For all those people who claimed they would never need algebra in 'real life' here is one reason that you do. For those who lack these skills, technology can help. Edwards does go on to talk briefly about the importance of financial education. He clearly believes that laws are the panacea here, and education is just a nice after thought to take care of places that the law misses. I believe the reverse. Education is the true panacea, and the laws should deal primarily with areas where education isn't enough to make things work. The difference I think, is that I believe poor people have the ability to learn how to manage their money. Some will doubtless choose not to, and they will probably remain poor no matter what we do. For the rest, they can learn to take care of themselves. I guess the bottom line, is I believe we have one America, where even the son of a poor mill worker can become a wealthy man. Strangely, Edwards does not seem to believe this.