by Katherine Mejia
All over the county consumer lending organizations like Citigroup are asking the government for bailout money in order to stimulate the economy and bring it back to health. But job cuts are increasing more than ever while financial holding companies are misusing bailout money to pay themselves bonuses, while many Americans are being laid off their jobs. Instead of freeing up capital and making jobs available to people drowning in financial turmoil they are using the money presented to them by the federal government to maintain their highly expensive habits at the demise of the average tax payer.
Bigger banks know the “too big to fail” theory very well and take advantage of it. They know that they have a major effect on the economy and when given bailout money to stimulate stock prices and get the economy back on track, they do just the opposite. Despite receiving so much bailout money stock prices for major banks have fallen showing that they still have not assessed the root of the problem. Consumers in need of loans should be aware of predatory lending. When the bailout money runs out and it seems like everything is back to normal banks will once again approach borrowers with loans inadequate for their credit capacities.
Consumers should also be aware that it is not lending that is the problem, it is the type of loans that banks were giving low-income families with low credit scores that is the problem. In order to stimulate the economy banks need to use the bailout money to start lending again. But with the issue of how the bailout money is being used, businesses especially are going to have to look for loans at banks that they would not traditionally consider. Smaller banks are working to refinance mortgages for homeowners in trouble, while bigger banks still have not learned anything from what has happened in the last year.
Bigger banks know the “too big to fail” theory very well and take advantage of it. They know that they have a major effect on the economy and when given bailout money to stimulate stock prices and get the economy back on track, they do just the opposite. Despite receiving so much bailout money stock prices for major banks have fallen showing that they still have not assessed the root of the problem. Consumers in need of loans should be aware of predatory lending. When the bailout money runs out and it seems like everything is back to normal banks will once again approach borrowers with loans inadequate for their credit capacities.
Consumers should also be aware that it is not lending that is the problem, it is the type of loans that banks were giving low-income families with low credit scores that is the problem. In order to stimulate the economy banks need to use the bailout money to start lending again. But with the issue of how the bailout money is being used, businesses especially are going to have to look for loans at banks that they would not traditionally consider. Smaller banks are working to refinance mortgages for homeowners in trouble, while bigger banks still have not learned anything from what has happened in the last year.
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