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5% per annum cap on all interest rates & charges

5% per annum cap on all interest rates & charges


Why this is important

Loan Sharks lock families, individuals and whole nations such as Greece, into un-payable debt; distressing families and ultimately making them homeless. But even low waged people can repay and escape debt if the charges are fair; eliminating bad-debts for lenders and reducing court cases, bailiffs and aggressive debt-collections.

Charges from 1950 to 1990 were typically on a Base of 7.5%, quoted as "2.5% to 6% above Base" or a maximum of twice-times Base Rate; and banks made good profits.

Lenders can now borrow at Base Rate, e.g. in the UK at 0.5% (half a percent). They lend on mortgages at about 5% or 10 times Base; on credit cards at 16% or 32 times; which increases to 30% or 60 times; pay-day loans are 300% to 3000% or 600 to 6,000 times Base Rate.

Loan charges are sandwiched and levelled at every stage of business – about 20 steps from raw materials through to consumer purchase. Capping the rate to 5% would reduce the costs at each step and final prices by 25%; beating inflation.

Only banks or the super-rich can buy money at 0.5% and sell it at up 6,000 times the cost. It is a privilege reserved for the 1% against the 99%. All the world’s religions and fair minded people are against such exploitation. The charges are now horribly greedy and excessive.

Ask your MP or representative to press for a national and global 5% per annum cap on interest and charges. Capping interest and charges is the most powerful and simplest action to liberate people from grinding debt; and it will boost the economy from the grass-roots upwards, creating huge sustainable wealth.

Posted May 15, 2012
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