By Jacki Schechner, national communications director, Health Care for America Now - 05/05/09 06:23 PM EDT
Scott uses stale, already-discredited talking points to argue against modernizing our healthcare system, against arming our doctors with the best possible information to administer the best possible medical care, and against letting us have the choice between private and public health insurance plans so we are no longer at the mercy of greedy, profit-driven private health insurers who put shareholders and CEO salaries before people’s health.
President Obama, the Democratic leadership in Congress and a majority of the public supports choice — keep your private health insurance or join a new public health insurance plan — and still opponents cry conspiracy and warn of some nefarious plot to secretly trick everyone into some fabricated, bogeyman healthcare system that exists only in their wildest imaginations.
In what is perhaps the most outrageous claim of Rick Scott’s latest diatribe, the former hospital chain CEO who was forced to resign just before his company paid out $1.7 billion in penalties and fines — the largest in U.S. history — for defrauding the government, making illegal deals, filing false data, granting kickbacks to doctors, and overbilling Medicare — accuses Senate Finance Committee chairman Max Baucus (D-Mont.) of wanting to “cook the books” to pay for healthcare reform. Just because Scott ran a corporation that believed in making money at the expense of honesty and good healthcare does not mean anyone else believes that’s a justifiable strategy.
Men like Scott should step aside and let us get back to discussing real details of reform that will help us finally achieve a guarantee of quality, affordable healthcare for all in 2009.
Keep competition in short-term credit
From Michael Flores, CEO, Bretton Woods Inc. management consulting firm
The “credit crunch” isn’t just about mortgages and large corporations. It’s also about people needing $200 or $300 to get through to their next payday. It means going to pawnbrokers, credit unions, banks, payday lenders and other financial services that make small loans.
As Congress considers legislation to regulate short-term credit — Rep. Luis Gutierrez (D-Ill.) recently held a hearing on payday loan reform legislation, and Sen. Dick Durbin (D-Ill.) and Rep. Jackie Speier (D-Calif.) have introduced a 36 percent annual interest rate cap bill — they should tread very carefully.
It’s just not that simple to regulate a $100 billion short-term credit market made up of a diverse group of products that charge different rates and are of various term lengths. A payday loan, for example, is typically two weeks, installment loans are three months, and pawn loan lengths vary.
Recently, I wrote a report revealing that banks are the largest players in the short-term credit market through “bounced check fees” and overdraft protection. In fact, banks garner $34.7 billion in revenue from these products.
When a consumer does not have eno-
ugh money in his or her checking account to pay a bill, they have the option of bouncing a check, using overdraft protection, getting a payday loan, paying the bill late or borrowing from another institution, primarily credit card advances, all of which come at a price.
The FDIC reports that the average amount of a check written to overdraw a bank account is $66. For that $66 check transaction, a customer would pay an average of $27 in overdraft protection fees. Customers without overdraft protection would pay a non-sufficient funds/bounced check fee averaging $28.95, plus incur additional fees upwards of $30 from the merchant to whom they wrote the bad check. In comparison, a customer who took out a $66 payday advance to cover the cost would pay a fee ranging from $9.90 to $11.22.
The 36 percent APR cap proposed by Sen. Durbin and Rep. Speier would leave some of these products banned (payday loans), some advantaged (bounced check fees) and some untouched (some installment loans). That’s because the shorter the length of the loan term, the higher the theoretical annual percentage rate, even if the actual costs are the same.
The Gutierrez bill has some good disclosure language, but it sets payday lending fees at $15 per $100 loaned. It sounds reasonable but why shouldn’t an industry be able to raise prices as costs — rent, salaries, taxes — go up?
The goal of any federal legislation should be to ensure that consumers have choice, the market has competition and that there’s enough transparency of all products so that cost comparisons are easy to make. Arbitrary rate caps simply pick winners and losers.
Saint Simons Island, Ga.