Tim Eriksen

Why Isn't the Government Capping Credit Card Interest Rates?

To be more specific on why your post is so off base. You wrote, "As each house is foreclosed, the banks themselves are put in a more perilous financial condition, since they ordinarily leverage each loan at a ratio of 20:1 for deposits held." Please name which banks have a 20:1 leverage on deposits. You would be in the ballpark if you said equity, but deposits, give me a break. Only a few banks have more loans than deposits, and they would have borrowed through fed funds which are not much different than CDs.

You do realize that if you capped interest rates on credit cards that finance companies would earn less money yet see little decrease in write offs and they would likely quit issuing credit to higher risk borrowers.

Why Isn't the Government Capping Credit Card Interest Rates?

Your analysis is stunningly off base. Little of what you say is accurate, and your suggestions would do little to help.