Transcripts For CSPAN Key Capitol Hill Hearings 20151225

He asked his wife, does it bug you when people refer to me as darth vader . And she said, no, it humanizes you. [laughter] announcer saturday night at 8 30 eastern, an indepth look at Community Policing in minority ethnic minority communities. Most people get defensive if they feel like you are being offensive. In invery respectful counters and requests, if it is not a crisis, if it is not a requests situation, versus demand, those things changed the dynamics a little bit. Afternoon atnday 2 00, race and the criminal Justice System with Valerie Jarrett and others. At six 30, portions of this years washington ideas festival, including mark warner, al gore, and annemarie slaughter. Weve got to banish the word he is helping at home. Helping is not actually taking the burden off you. You are still figuring out what needs to be done and your ask him asking him to help. He is not the agent. He is the assistant. And if we are going to get to where we need to go, then do have to be a lead parent or evil coparents. Or equal coparents. As 2015 wraps up, cspan prisons congress, year in review, a look back at all the newsmaking issues, debates and hearings that took center stage in capitol hill this year. Join us thursday, december 30 first at 8 00 p. M. Eastern as we revisit Mitch Mcconnell taking his position in a Senate Majority leader, Pope Franciss drugric address to a congress, and the election of paul ryan. The nuclear deal with iran and reaction from congress on Mass Shootings here and abroad. Gun control, terrorism, and the rise of isis. Year in review on cspan thursday, december 31 at 8 00 p. M. Eastern. The president you president s weekly address, he is joined by the first lady to deliver a christmas message. This is twoandahalf minutes. President obama merry christmas, everybody. This is one of our favorite times of year in the obama household, filled with family and friends, warmth and good cheer. That is even true when i spent onnynight chasing bo and s away from the cookies we left from santa. Obama we spent the past month helping everyone get into the holiday spirit. Our theme this year is a timeless tradition. The decorations in each room reflect some of our countries must cherish pastimes, from saluting our troops and their families to helping children dream big dreams for the future. And we have invited thousands of families here to the white house to enjoy the festivities because there is no holiday tradition more timeless than opening our doors to others. President obama today, like millions of americans and christians around the world, our family celebrates the birth of jesus and the values he lived in his own life. Treating one another with love and compassion, caring for those on societies margins, the sick, the hungry, the poor and the persecuted, the stranger in need or simply an act of kindness. That is the spirit that binds us together, not just as christians, but as pigeons of all faiths. It is with the holidays as christians of all faiths. It is what the holidays are about. This is when we celebrate our blessings we hold dear. Women in brave men and our military served to keep us safe and so do their families. We sing carols and opened presents, as we win snowball fights president obama or loose snowball fights Michelle Obama lets give to those who have given to our country so much. Show them justn how grateful we are for their sacrifice. That is a tradition that we all can embrace today and everyday. President obama a half up melia, sasha, bo, sonny, grandma, may god bless you with peace and joy in the ahead. Announcer the announcer of the book how the f how the other half banks we talked of how to the Banking Services for the working poor. This is an hour. Joining us now from atlanta is Mehrsa Baradaran, the author of the book, how the other half banks exclusion, exploitation, and the threat to democracy. Good wednesday morning. Thank you for being with us. Guest thank you for having me. Host let me go to the premise of the book. Of write the following, one the great ironies in modern america is that the less money you have, the more you have to pay to use it. 90 percent of americans consider themselves middleclass it anywhere from 20 40 of the population must rely on alternative financial instruments. Guest a lot of us who have Bank Accounts and up operating in a digital world. Bankve credit cards, the , weles the auto bill pay connect to our Service Providers and shopping and all of this it is done through the Network Operated by credit cards and debit cards and bank operations. And those who dont have bank , or those who have to use other services, they operate in a cash economy. And that economy is expensive and stressful. So if you have to pay a bill and you dont have a bank account, you actually have to go to the water office, turn your paycheck into cash and then you turn the cash into a money order or take the cash to the water office and pay for it there. So there are Financial Services that we who have Bank Accounts dont think about because we that worry about the way the cash from our accounts gets there. Thats what i mean by it being more costly. There is another aspect besides checkcashing and money transfers, but the credit aspect. So if you are short three dollars or 400 and your tire needs to be changed, if you have cost,rgency or unexpected a lot of us can tied ourselves overthrew some savings buffer or credit card. But there are a lot of folks out there, and this goes well into the middle class, who consider poor, but you end up having to get a payday loan or a title loan. So if you need 300 to fix your tire, you end up paying Something Like 1500. And that is a costly transfer. It ends up being the only option other folks have. The book starts with that premise because i think it is not just an economic problem, it is also a sociopolitical problem. Host you point out in the introduction of the book, that other that over half the people who had to take out 400 from their bank account would have to sell something or borrow money to come up with the cash. Guest it is a federal statistic. Half the country doesnt have 400 in savings. Go to a folks can friend or Family Member and get the money if they need it. But there are costs there. And some people dont just have friends or family with the excess money. So they end up having to go to a service provider, a payday loan, and you see this industry is massive. So you have to think about how much demand there is. This is more than a mcdonalds and starbucks combined. This is a huge demand that is being served by this industry. Host we will put some information on the screen and remind the audience to get the calls in just a few moments. The book is called how the other half banks exclusion, exploitation, and the threat to democracy. About 20 of the population either have no bank account or rely on checkcashing store fronts. Is average Household Income 25,000 and 10 of that income goes to fees or interests. Also, the average customer is indebted for 199 days. Half of the loans are made in sequence of 10 other loans. Can you elaborate on these points . Guest yes, the process of the payday loan is that it is meant to be rolled over. You are borrowing against the next paycheck. The folks were doing this have to have a bank account and they have a regular source of income. You can borrow against the next inflow. The problem is, you are never paying off the principal of the loan. In other words, the actual money you take out. But he pay fees as interest on that loan. So when the two weeks is up, a lot of folks and up having to roll it over. Something like 20 roll it over around 10 times. These loans are meant to be a cycle of debt. And even the Business Model of some of these firms put that in the management material. So this is where it becomes problematic. Pr and seeeasuring a how much interest there actually have. A lot of the loans are from range of percent range of 300 200 . Are able to get around them because they can charter on a native american state or they call them fees. You end up paying a lot of money because of the rollover process. Host our guest is Mehrsa Baradaran. She is out with a new book called how the other half banks exclusion, exploitation, and the threat to democracy. Are dividing our phone lines differently for this segment. 202 is the area code here in d. C. For those who earn immediate income of up to 50,000 a year. That number is 202 7488001. We also welcome our listeners on radio and on the iphone app available for mobile devices. Let me ask you about traditional banks. This is a fascinating history. Hopefully the readers of the book will also see that. Throughout history there was a compromise, and understanding that government supported banks. Without government support, banks dont exist. The banks can be there on the ground to meet the needs of the community. So when we put geographic restrictions around banks up until the 1990s, if you were a bank, you could only be a bank in one community. You were in atlanta, you couldnt have a new york branch. The result of that was that most communities had a bank. The wealthys served and the poor in the community. So we had access basically nationwide. Thats a start shift during the 1980s as we see regulating. That allows the money from atlanta to go to new york. And you have many different branches. So these banks get bigger and bigger. You see bank of america who has branches nationwide, and they are able to put money in the most profitable branches, you shut down the branches in areas that are not profitable. What is not profitable . Innercity areas or rural areas. Other banks, the savings and loans at the George Bailey bank that was fictional. Mess are involved in this exit is from these low income communities. Happens, there is a direct correlation between those banks leaving and the payday lenders filling the void. Is, it isntt it profitable to lend a 500 loan if you are a bank. You would rather loan a multimillion dollar loan because it is the same overhead cost but you are able to get much more interest. Taking smallor deposits doesnt yield much money. Has tried tot enhance these banks and entice these banks and it hasnt worked. Banks are not interested and it is not profitable. There is money to be made elsewhere. Matt smith,s from he says, it is expensive eating poor in america. Expensive being poor in america. Guest thats right. It is. It is hard to understand that. Or people who arent poor it takes a lot of empathy and living in someone elses shoes for a whilet but once you understand how many sharp edges there are two poor , and thatives financial aspect of it is not the only one. There are many. Things that happen, unexpected emergencies, they can really set people back. And once you take out one of these loans or even go to a Family Member, it can really snowball. And your life can be fragile. A lot of us dont spend the time thinking, what would i do if i money in mysome bank account that i could throw out if i needed it. Host another viewer says, payday loans are a trap. They need toe time avoid one fee by incurring another. From the book, how the other half banks exclusion, exploitation, and the threat to democracy, another point from the author. She says that the fight for was startedbanking before the ink dried on the constitution. Ended sometime in the last few decades as deregulation did away with attempts to restrict bank power. Banks became large and powerful and stop serving a large section of the population. Baradaran is joining us from atlanta. Jack,go to rhode island, you make more than 50,000 a year . Caller yes. I worked on wall street for 30 years and i reached the levels of middle management. I was fortunate. I was trained by three very wealthy jewish gentleman. When i wasld me running the business at 25 years old, they said you have to bring value to the table. Ok . Once you reach a certain , i was treated well, but i reached middle management and it was very difficult to make hundreds of millions of dollars a year. That is controlled by a very small select International Financial elite. They run the game in the world. It doesnt matter who is running for president , democrat or republican. Will housesay, he the gold will will be world. Money controls everything. And you have to hand that to them, the jewish people control world banks. From providence, rhode island. We will get a response. Guest he brought up wall street. It used to be that we separated investments and trading from the Banking Industry. And as we have seen over the last 20 years, those things have merged. Growing fury of wall street was that they were doing it, is financial innovation, to help us out and really after the financial crisis, it became apparent that wall street is massive. It is much bigger than it was. And the size and risk that comes with that isnt really helping us do anything better than we were before. It is really not a benefit to main street to have wall street be so large. Risk,e of the heightened main street is threatened whenever the machine of credit freezes up like it did in 2008. Freezes, we cant get the loans that we need to make our lives go. The other thing that became apparent was that wall street was also backstopped by the federal government. And this is a point that a try to make in the book several times. To say, let the market handle people handle the poor. We do have a market for payday lending and i dont think those high costs are the market price. And i talk later about why but we dont have a market in banking the way markets of supply and demand traditionally work. We have a federal government backstop that doesnt allow the banks to fail. There are reasons for that, political but other reasons. We also have trillions of dollars of federal money going into these wall street banks. That is dependent on them lending it to the rest of us. It isnt being led to the rest of us. Whether itable about is even benefiting fortune 500 firms. It seems that money is circulated around and wall street through the derivatives and the trading. The question is, with putting so much money and wall street, is the money coming down to help us out as a society and economy . Your mentioning before to the caller and i talked before about the evidence low in the u. S. History about the debate about what banks should do and we dont have that debate as visibly and as strongly as we did. There was Andrew Jackson who waged a bank or and Thomas Jefferson and Alexander Hamilton fought so vigorously about the banks. Fdr wereilson and strong leaders who took on the Banking Industry. Some of them make mistakes. Maybe they didnt fully understand it but there was the exchange in the conversation and we dont see that as much these days. Before joining the university of georgia law school, our guest, mehrsa at brighamtaught young university. You make them between 25,000 50,000 . Caller yes, i do. I am a veteran. I average in the middle. My wife had to have knee surgery. And the insurance that she has , ther job only pays 80 , wethat we have to pay found out what we read for the surgery that i had to pay that before she could get the surgery. Fromo i had to take money our bills from my check to pay for the surgery that she was going to have. That is put me behind. From to borrow money different places in order to make up for the money that i had. And now i have loan bills to pay have got to cover other things that i have. And i find now today that the president or the government is not going to raise Social Security. The government is not going to vase the the a the payments that we get but Everything Else is going up. I just dont understand how the middle class is really the poor class now. Host thank you. Guest im so sorry to hear that. I agree with you that there are a lot of folks medical emergencies,. My daughter also just had a i am fortunate enough to have insurance that covers it but i feel the same way, because if i was not, it is a high cost and you would look quickly to find that money. There isnt really an option to not get these surgeries that will save our kids lives or make your life better. So you make it work even if that means borrowing from a place that you know is costly. Say from the book, you french lenders are causing problems in our society that are cause for alarm. We might approach them with temporary solution and relief if we look deep enough we will find a cancer eating away our democracy. Guest yes, the point im trying to make their is that the payday lending industry isnt the problem. There has been a lot of talk about it. I think it is a symptom to a bigger disease. Becauseon i say that is i come at this from a banking perspective. I actually walk i actually worked on wall street and i said he banks. I studied banks. I understand help banks work and how the credit market functions and how they lend and the decisionmaking that goes into it. And also the governmentbank relationship. So coming at it from that angle, payday lending is a symptom. The social contract that we have has been breached. Banks to do something for us and that is why we support them. We have never been so supportive of banks in all of our history. We give trillions of dollars in qe and discount loans and all of these complex ways that we are supporting the Banking Industry and there are not doing the thing that we need them to do. And the payday lenders are. So i dont think the payday lenders are they are sharks, sure. But that is a market void that was created by the banks. We just blame them and just try to stop them, it ignores the huge demand that they are meeting. And what it stops, they will come up in another form. So we had to take a look at the Banking Industry. A hard look at what the taxpayer money is buying. It is now in loans or asset purchases so we can say, we have made a profit. But if you look closely, these banks dont exist without huge Federal Reserve and federal government infusions of credit. What do we get from it . Host mary jane is joining us from ohio. Good morning. Mom today is going in for Financial Advice from her banker. They contacted her and want her to take the money out of the savings account, and it is a sizable amount. She has money invested but she wants to keep a fluid part of money for her in case she needs it quickly. Is there some reason why they would be paying so much attention to her lack of making money . Is there something going on right now . Shes older and they want to get the money out of the savings and into some other fields. I dont know what it is, i will go with her today. Is there something we should be on the lookout for that might be a trigger . I dont want to end up like greece, where they take all of the money that you have in the bank. If you could give me insight into that. Host do you trust your Financial Advisor . Caller well, i dont know. Within thes changed last 1. 5 years and it seems like bigger. Eager it is i just dont know. I dont understand. I just know that there are Different Things that she could be invested in and she did call her broker to find out if theres something she could get the money out and still make money. Right now she is making nothing on the savings account. Host how much money are you talking about . An estimate . Caller considerable. Under what hundred thousand dollars but it is a lot. Host thank you for the call. I think something that i hear a lot is that people dont trust their banks. You say it went from a little bank to a big bank. That is a common story. A credit union but it does get bigger and bigger all the time. So i think that you are pointing out i dont know who this bank is. I cant answer your question specifically. I know that the Federal Reserve has increased rates so hopefully your banker is trying to find a higher yield place for your mom. I hope that they have her best interests at heart. Toefully they are not trying swindle your mom. Ask a lot of questions and make sure you are comfortable. Ask a lot of questions and go online. With thehe problems Banking Industry that i highlight in the book, i am not turkey im not talking about bernie madoff. I think there are a lot of problems on looking at the whole largescale thing. But i dont think that people are out there trying to steal money from good folks like yourself. I hope that is not the case. Book, mehrsar baradaran writes the following. Banking policy has always reflected the social goals and civic principles of each bureau. The state is shoring up a powerful Banking Industry that is, in turn, excluding those americans most in need. Back to your phone calls. Good morning. A ged teacher. One of the problems that i have is getting students to understand the concept of percent. They recently had a student say that i said he had any idea how much that percent would be in a year . She had no concept of that. It is such an immediate need that they dont understand. Not in their own selfinterest. I wanted to mention that are representative, her Largest Campaign contributor is the loan offices. The ones that are ripping off these poor people. The last thing i would like to say is that i think it was Elizabeth Moran who mentioned Elizabeth Warren that mentioned post offices could do a better job of providing they used to be postal savings. Involvedices could get in low income people and their reasonable rates of interest. Host thank you from the call. You mention the Postal Service and this is a related tweet. Postal banking could provide lowcost Financial Services through the nations 30,000 u. S. Post offices. You response . Guest im glad you brought up postal banking. That is what the book is about. The conclusion of the book. I think there really is a solution here and i have worked with Elizabeth Moran and Bernie Warren andelizabeth bernie sanders. They have supported this idea. I think this is the conclusion i came from. We need a public auction for putting all this money into banks. It supposed to get to the people and it is not. Its getting sucked into the middle man. Lets have a direct route. I see that happening through the postal banks. The last two chapters of the book go through that history in United States of our very robust postal Banking System and how well it works. Folks, we, low income get it from 1910 until 1966. Most developed countries have this system. Its a winwin. There are a lot of multiple parties winning. People dont have use of payday service. Is this massive inequality we have in the Banking System. We balance the scales a little bit and that is a win. Elizabeth warren is an advocate. We are waiting. The union just delivered 150,000 signatures to the post Office Inspector Generals Office this last week. The momentum is building on this idea and i hope it keeps going. I wrote an article three years ago advocating this. It was sort of an academic pie in the sky idea. I have been so happy to see how it is really gaining legs and people understand the scale of the problem and how Common Sense Solutions postal banking is. I am glad you brought that up. You look at the Theoretical Foundation i lay out in the book because it really i usually dont come that problems with a solution. I tried to lay out the problem. That is what i did on the first go of this article. I wanted to talk about the problem in the banking actor and the post Banking Sector and the postal banking was so obvious. I have not found a reason to put it aside. I think its a good solution. Host the kansas bringing the caller ringing of the point that the representative getting support from these payday lender companies. How pervasive is that . Guest it is pervasive. They have not had the fight national yet. Be cfpd, regulating consumer loans, they started to focus on payday loans. The rules are just rolling out now. The payday lenders have been really effective arguing statebystate for their cause. And includes raising caps allowing products to be called Different Things. Georgia we dont have payday loans are banned in the state of georgia but we have title loans, installment loans. They create some other form by which the land these high rates lend these high rates. We should watch these industries. We should see who is lobbying whom and how they are trying to get around these laws. What we really need is a solution. In so far is there is huge demand, there will be a supply that i did either the payday anders, or we push underground and have oldschool loan sharks and i would hate to see that happen. Host weve been through a week of authors. Mehrsa baradaran is our guest from atlanta on how the other half banks. We welcome our listeners on cspan radio. Another half hour in our conversation on this book. Stuart from virginia, good morning. My money is inherited wealth most of it. I make money off of a check of the military and from the civil service. Thats how i make the money i make. Was 3500i live in when i bought it 60 years ago. I own everything around it. That is what aided me to keep late the wealth ive got. I paid for used cars. I lived below my means. And i intend to pass on my inheritance to the next generation. Thats how i kept my head above water. Host thank you for the call. Guest you are very lucky you had property. That is the number one way people accumulate wealth. You brought up the racial disparity, the huge wealth gap. Africanamericans have been excluded from Property Ownership by policy, jim crow, segregation, discrimination. When you dont have property youre not able to pass the wealth from generation to generation and that greeted acute problems. Edc more africanamericans percentagewise having to rely on paydays because they dont have intergenerational wealth. Racial breakdown of debt and , as are anot equal lot of things in this country. Host we are talking about payday lenders and the friends Banking System. Zachary is next from alabama. Good morning. Caller good morning. I had a couple of questions more on the legislative point of view. Is there any legislation in place or any champion for this in congress . Or are these issues statewide and statecontrolled . You are saying in georgia they banned, but didnt comprehensively cover the issue. Guest are you talking about payday loans or the postal banking . Host payday lenders. Guest they are regulated statebystate. Most of that action is on the state level. Congress. S not in treatedagency that was during dodd frank and charged with regulating these types of loans. They are starting to look at it. There are champions in the senate and congress. Sanders,arren, bernie senator brown. B does have some champions in congress but the action is at the state level. And then in the agencies host larry is following up saying, who is profiting and owns these businesses . Guest i talked about this in the book. There was this facade of informality. They look like neighborhood momandpop payday loans. They have bright signs and usually kind of shabby and in low income areas. There are about five or six major corporations that own these payday loans. One was just purchased by one of the wealthiest four people in mexico for people in mexico. They are massive and highly profitable. A lot of them are Public Companies funded by wall street. Organized and quite large. Host roger is next from ohio. Good morning. I did have a regular bank account and credit card bills. Me to sell ited for . 25 on the dollar but i had come up with 2000. I did that by going to a payday loan people. Mine was once a month to set of every two weeks. I did that for about a year until i got some extra money. I have a question and a suggestion. If i did not have the loan and i nced a check at 835 fee, 35 fee, why is it interest . Are they doing that on purpose to make the Interest Rate look higher . Host thank you. Guest thats a great question. This is a lobbying issue. Banks have succeeded in not calling this Overdraft Fees interest. They are fees. Banksl cases where the would pile on the fees so you overdraw once and they would just charge you 35 and then another 35 the next day. That looks like a lot of interest but you call it a fee and its below the use reason. That is why a lot of People Choose wisely not to have a bank account. Or to not use a bank account. They are scared of the Overdraft Fees. They are random and punitive and have no connection to the cost of paying for this overdraft. These are banks punishing customers and repelling small accounts. Banks want small accounts so they put these fees on to give that message to customers that they are small savings are welcome. They collect free checking but you have to have a minimum to put in a banker for the start charging you. The reason i know these charges are not the cost of the overdraft is because there are several. A bank was piloting account or you would pay a five dollars monthly fee. If you overdrew on your account they would freeze it. Anything to do that if you dont have the money in your account and you draw a check on it, they just wont honor the check. You can deal with that yourself and set of stopping the 35 fee. Or they could let you overdraw and in charge of interest on the amount you have overdrawn. That is how the postal banks in the u. K. Do it. They land in that way. He overdrawn by 30 or 50, and until you make good you are charged interest. Its a reasonable one and set of a random 35 fee. Host our guest, Mehrsa Baradaran has written for vanderbilt law review. Bankingy, a former professor and teaches law at the university of georgia. Pamela and marilyn, good morning. Caller good morning. I did not hear the last two , but i cant understand why these payday loan banks or payday loan establishments are allowed to be in existence. Basically aas said person that has five dollars in their account, they withdraw it and overdraw the account they can be subject to do all these fees. Why is that allowed . Guest good question. To be that our culture did not tolerate usery. Many religions said you cannot charge high interest. Every thing started happening will be deregulated in the 1980s. Will make therket rules on how much interest there is. Allow up to 700 700 interest through these payday lenders. They are allowed because we as a society decided this is ok. And because there is a demand. I do want to be clear. If we shut it down and write legislators and say we want payday lending gone, that does not solve the problem. It solves one symptom of a problem. Book, itsght in the not the tumor. Is the symptom of the larger cancer. Host viewers say it is hard for young people to have Bank Accounts or established that it was all the punitive fees and catch22s. Host guest i think a lot of people are choosing not to bank at establishments. A lot of Young People Trust google and apple more than bank of america. They have gone and are putting their money in some sort of a paypal or prepaid debit card. They just dont trust Banking Institutions anymore. Once they start earning more money and having to get a mortgage and things like that you will have to deal with a bank at some. Point host did people want to follow you on twitter . Uest Mehrsa Baradaran host lets go to john from michigan. How much do you make a year . 125,000 dollars. I have a Social Security and small pension. Before that you could write a book on this, easily, i owned the Truck Company and i was making wanted to 50,000 a year. 150,000 year. I was doing the payday thing. I was doing one credit card to cover another one. Hit the recession immediately the bank she mentioned closed in on me. 9 toss account went from 33. 5 . I thought them for a while and the comptroller in the treasury. Eventually i wound up losing everything. The trucks, the house, the new cars. Its funny she is out of atlanta because i ran from atlanta to miami a lot. I started listening to mr. Ramsey on the radio. Boy, what good advice. If you cant pay cash, you dont need it. Aat i did is i bought foreclosed property appear for 7,800. Really run down. Pay cash. I fixed it up. It is beautiful, christine pristine. My vehicles are older but i know had a fix them. The parts are less expensive. If you cant pay cash, you dont need it. Everything i have now is paid for. I sleep good at night. Im looking at other properties now. Host thank you for the call. Guest i think its interesting. Congratulations. Im so glad you regained and that is good advice. I start the book with this, a couple of stories where someone similar to you. Who strained financially has an unexpected expense or something happens and the end of meeting alone to make it needing a loan to make it. A 300 loan once of costing 2000. The other story and make up as a person named steve he was doing really well before the financial crisis. Things are going in and out. They are operating under high leverage which seems like you are also were also. It looks to be balanced. Then the Interest Rates spike. Some investments go really bad and they lose everything. That person finds a miracle over so theye them cannot lose everything. They know they are good for it. If they can just make it through this credit crunch, they can get there. Steve is not a real person. Its a bank. This is essentially what happened. They were maxed out like yourself. Investmentsot of they just figured would work out. They had revenue coming in that they were in heavy debt. Lehman brothers was leveraged, aig had trillions of dollars of outstanding debt. They figured they would make. When they did not, people like yourself would go bankrupt. The banks dont. Thats part of the problem. Society a moral ambivalence about debt. People like dave ramsey give also they saynd those that borrow are morally inferior to those who a in cash. Pay in cash. But we have a Banking Industry and that is their motto. If we are going to be sanctimonious about those who borrow and say youve got it on yourself, then we should think about that with the Banking Industry and maybe say if you borrow too much and you fail, you have to fail. Host jim from cookeville, tennessee. Good morning. Caller good morning and merry christmas. I drive a truck for a living. My total income is somewhere between 90,000 and 100,000. I have a couple of rental properties. I know a fellow that has a degree. A younger guy. At the time he was in his late 20s. Could not find a job and floundered around. Himmother died and left probably 30,000 to 40,000. And life insurance. Started lending money out of his pocket to people. Interesting than 10 if they were able to pay back in one week. He did this for a long time. Probably 10 years. This guy now lives in a multimillion dollar how that house house and he just loaned money out of his pocket. Smart guy, young kid. But totally unregulated, right out of his pocket. I know what he was doing was illegal, it has to be. The Interest Rate would cap out over 18 a year. Be a highly regulated i think its deplorable. Its embarrassing for a country to even be forced into Something Like this. Host let me get a response and thank you for the call. Guest its perfectly legal. 18 is well below but the payday lenders charge. Is itou are saying shouldnt be. Its immoral and wrong to charge people that much. I tend to agree with you. There is a sense that because you have money you are taking advantage of those who do not. This is why a lot of religions, christianity, judaism, islam, buddhism, hinduism outlawed usery. To charge someone who doesnt have money for the loan. We can debate on the morality of this. Tohink a lot of people tend have his opinion there is something wrong with this. I dont feel good about this person doing that. I would say your friend is charging people less than what they couldve gotten from the payday lenders. Maybe they preferred to borrow from him. I dont know how he collected. I hope he was not using violence or extortion but that is a problem you have to deal with. It is perfectly legal unfortunately. When peopleote, of lesser means than us borrow from payday lenders it reveals their ignorance. The richer guilty of financial but financial mismanagement by the poor is seen as morally reprehensible. Guest i think we have a sense if youre borrowing from the dumby loan you are done or dont understand. If you had financial education, you would not make such a mistake. People who use these loans. I have studied them. In my experience its usually not the case. They are actually more financially savvy. I have a buffer. Im very lucky. I dont have to worry about feeding my kids for one month to the next. If i screw up, i can still feed them. Some people dont. When you are balancing on that thin tightrope you can to take financial matters seriously. I think when people go to these payday lenders they had no other choice. Studies prove this out. They have gone to friends and family and tribe credit cards and they fully understand the costs. For those of us were middleclass or those that are wealthy to wagner fingers and say you were making you are stupid and making a bad decision, i think that is hypocritical. Badlso make that b decisions. Plenty of people went underwater by buying big houses they could not afford. Plenty of bank ceos did the same thing. I think financial mismanagement is not domain exclusively of the poor. I think the rich and middle class can all live above our means and we often do. Host Mehrsa Baradaran, explain the cover of the book. Guest i did not pick it. This is the cover and harvard press, my publicist, they take a picture. I think what it shows is payday lending establishment is usually in a lowincome neighborhood. This has become part of life and that is what is it is meant to represent. Many of you have gone inside to observe. They are checkered all over certain neighborhoods. Not another neighborhoods interestingly enough. Some people have never passed the payday lending site. In some its right next to mcdonalds. Places you go everyday. Host dolores is next from tennessee. Good morning. Isnt ity question is true that all money is actually borrowed into existence . The federal government does not print its own money. It borrows it in that it brings into existence that way. It hase federal debt, been borrowed to cover the deficit but if it printed money, they were just print money. Host we will get a response. Guest that is an important point. Banksof people think of and bank loans is operating like deposits coming in and being out. Lent that is not the way modern banks work. When banks make a loan, they treat a deposit. The banks multiply money. They make more money and this is not money this is electronic money. That is how they multiply it. The federal government is printing and borrowing all the currency you see. Its an iou from the federal government. Initially how banks were formed in the bank of england is that the government put in money in the form of a loan to the banks. That loan is never been repaid. He just keeps getting circulated and multiplies. I think people, it used to be we had a gold standard. That was never quite stable. When they talk about that now its a misunderstanding of how money works. Multiplies and that is what makes our economy grow. It is not a fixed number we have to balance and get within. It is treated or bank lending and that is how the Federal Reserve also pushes money out by lending. Trillions of dollars. Its being linked to these banks lent to the banks and the way it circulates is quite complex but its worthwhile to figure out. There is a lot of misunderstanding in the public. Host i want to follow up on how about the charges for those reports mortgages that many others are using with thousands in upfront fees . Guest that i find it be predatory and morally awful. A lot of these folks go out and find people. They give up a reverse mortgage and a big pile of cash in the own your home. The elderly you then cannot ask the home on, its a bad idea. Unless you have a plan on how you can pay it back and why you need that money. I think it is probably not a good idea. Host the. Last call is from fredericksburg, virginia im from panama city. Host patricia youre on the air. Caller what i wanted to ask is my daughter had 10,000 in a money market account and it dropped down to 8,000 and now the bank is charging her 15 a month to leave it there. Is that normal . Guest its totally normal and happens all the time. She might want to change banks or find a credit union. , i havent talked about that enough. Its a way to solve these problems. Not all of them but some of them. Unfortunately, totally normal for them. Its probably in the papers your daughter signed. Host Mehrsa Baradaran in the book is how the other half banks. Thank you for spending this last on the next washington journal, Peter Ackerman on up president ial debates to third party candidates. And advice from kevin mccormally. Washington journal live at 7 00 a. M. Eastern on cspan. Holiday weekend, American History tv on cspan 3 has three days of featured programming. This evening at 6 30 eastern, to mark the 125th anniversary the birth of dwight david eisenhower, gathering for a rare family discussion to talk about his military and political career as well as his legacy and relevance for 21st century americans. Then on saturday afternoon at 1 00, 60 years ago, rosa parks deified a City Ordinance for blacks to leave their seats on a city bus to make room for white passengers. The and helped instigate montgomery bus boycott. Well reflect and see what role lawyers played in the protest and the Civil Rights Movement as we hear from fred gray, attorney for rosa banks and demonstrators. Then at 6 00, civil war author and historian William Davis on the little known aspects of the live and leadership of Union General use lisiest s. Grant and confederate grant robert everyone lee. 1965 Progress Report on nasas projects including the nned Space Program and the flyby of mars. Rick burns on how the public learns about history through film and television. American history tv all weekend and on holidays, too. Only on cspan 3. Up next, first lady Michelle Obama welcomes military members and their families to the white house for a look at the holiday decorationed. During her remarks, mrs. Obama spoke about the importance of community and serving others during the holiday season. His is about 10 minutes. Hello. I am a navy spouse and my husband is currently stationed in virginia. I was so excited to learn that i was selected as a holiday decorating volunteer. This has been surreal. This is my favorite time of year and i am sure that my fellow volunteers would agree that this is truly an honor and a joy to have had a hand in the magical set up around us. I have lost count of the number of jaw dropping moments we have shared, hanging ornaments while George Washington looks on, trying to make a room designed by Jackie Kennedy even more beautiful. As i watch the room transformed by many willing hands from so many backgrounds that have come together, i have reflected about how the holidays are about community. As a mom and a military spouse, i am most satisfied to help decorate the white house as a way to show my appreciation to the first lady and dr. Biden for the hard work they do with joining forces, their initiative to highlight the challenges military families face. My family felt the warmth and support fostered by joining forces while my husband was deployed to afghanistan. We are inspired by the many ways americans have responded to this call for understanding and are providing solutions, from Mental Health resources to supporting military children to encouraging the hiring of veterans. Again, it is about community. And now it is my honor to introduce first lady Michelle Obama. [applause] first Lady Michelle thank you. Hi, everyone. What is going on . You guys doing ok . Hi to you guys, the grownups here, too. [laughter] welcome to the white house. [applause] first Lady Michelle it is the holiday time. Let me start by thanking our speaker for that wonderful introduction as well as all of the volunteers who have traveled from across the country. We have people who have come from around the world to help us decorate the white house for the holidays. I also want to say a special thank you to all of the service members, our veterans, our Wounded Warriors who are here with us today